Company Snapshot: Hastings Hotel Group Ltd.
Hastings Hotel Group's profit margins squeezed by recession
The Hastings Hotel Group includes the Culloden, Stormont and Europa Hotels in Belfast, Ballygally Castle and a joint venture share in the Merrion Hotel in Dublin.
The group continues to trade successfully but with margins squeezed reflecting the impact of the general recession.
Turnover in the year to October 2011 was lower than in the previous year but this continued a year- by-year reduction of 13% from the highest recent level in 2008. A rise in revenue from the joint venture hotel was offset by a fall in turnover in Northern Ireland.
Operating profits in 2011 were well down from a peak recorded in 2007 when operating profits were nearly three times the recent level. Operating profits in 2007 were the highest in the past decade.
Pre-tax profits were lower than operating profits because of the deduction of significant interest payments on borrowed funds. Gross interest payments in 2011 were £902,000.
The scale of borrowed funds has fallen year by year and at the end of October 2011 were just under £15m, compared to just over £18m in 2009.
Capital expenditure on hotel assets, at £984,000 last year, has fallen steadily from the levels recorded in the last decade.
Unusually, expenditure on capital assets has, in the last three years, been lower than the allowance for depreciation reflected in the profit and loss accounts. In the last three years, average employment numbers have remained at just over 1,000. In the last six years, the balance sheet value of shareholders' funds has risen. In October 2011 it was nearly 50% higher than October 2006.